What might be the cause of the economy poor performance


Problem: It is possible for a nation to experience negative economic growth.

Suppose aggregate growth in an hypothetical economy was: g = -0.6, even though total savings (s) averages 23% per year. Assume a depreciation rate of 3%.

Can you reconcile these figures with the Harrod-Domar Model?

What might be the cause of the economy's poor performance?

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Macroeconomics: What might be the cause of the economy poor performance
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